Welcome to the home page for the Office of the Chapter 13 Trustee in Tacoma, Washington. This website is designed to serve as a resource to the Chapter 13 community. The office operates a public trust and, as such we strive to provide the highest level of service and financial accountability to all parties.
Notice From Trustee Regarding Recent Legislative Impact on Chapter 13 Cases (“Stimulus Bill”)
Recent federal legislation broadly implicates Chapter 13 bankruptcy practice. I offer the following as my interpretation of the relevant law to provide consistent guidance for all stakeholders in my district. In short, Debtors need not commit (or formally disclose) the direct payments and other rebates they receive pursuant to the most recent stimulus bill.
The American Rescue Plan Act of 2021, Pub. L. No. 117-2 (the “ARP”), was enacted on March 11, 2021. It provides relief for qualified individuals to address the impact of COVID-19, including additional recovery rebates and expanded child tax credits.
The ARP provides for a third round of recovery rebates, which total at most $1,400 per individual or $2,800 per married couple filing jointly, with an additional $1,400 paid for each qualifying dependent. The rebates are payable in full to qualifying individuals earning less than $75,000, married couples filing jointly earning less than $150,000, and heads of household earning less than $112,500. The rebates decrease above those thresholds until completely phased out at $80,000 for single filers, $160,000 for joint filers, and $120,000 for heads of household.
Recovery Rebates, Means Testing, and Disposable Income
Section 1113(b)(1) of the CARES Act amended 11 U.S.C. §§ 101(10A)(B)(ii) and 1325(b)(2) to exclude “payments made under Federal law relating to the national emergency declared by the President under the National Emergencies Act (50 U.S.C. § 1601 et seq.) with respect to the coronavirus disease 2019 (COVID-19)” from the statutory definitions of current monthly income and disposable income. Accordingly, recovery rebates received within six months before the filing of a bankruptcy petition need not be included in calculating a debtor’s current monthly income in a chapter 13 case, and further may be excluded from projected disposable income available to pay creditors through a chapter 13 plan.
Child Tax Credits, Means Testing, and Disposable Income
The ARP also expands the existing child tax credit for tax year 2021 by increasing it to $3,000, or $3,600 for children under six years old. The additional credit amount over the existing $2,000 per eligible child credit phases out beginning at $75,000 for individual filers, $150,000 for joint filers, and $112,500 for heads of household. The ARP also provides generally for advance payment of 50 percent of the estimated allowed child tax credit for tax year 2021.
I do not expect the additional tax credits to be a factor in determining projected disposable income in chapter 13 cases because, among other reasons, the expanded tax credit is limited to
tax year 2021.
This summary is an overview. Should any debtors desire a more thorough explanation, I strongly encourage them to contact their attorneys. We are working diligently to provide the best possible service to all stakeholders, given the challenging circumstances we face. As always, I am honored to serve as your trustee.
3/16/2020 – UPDATE FROM TRUSTEE, MICHAEL G. MALAIER, RE COVID-19
My office is aware of the hardships imposed by the COVID-19 virus and by those necessary measures to mitigate its transmission. Please know that I am following guidance from the CDC, WHO, and local authorities to keep my staff safe and secure during this crisis. As such, many of them will be working remotely so as to practice social distancing and care for their families. Be confident in knowing that, despite the distance, we are taking all necessary steps to ensure that our cases are administered accurately, and without delay. Rest assured that your payments, data, and correspondence are as safe as they have always been.
3/11/2020 – COVID-19
Notice from the United States Trustee Regarding the Rescheduling of Section 341 Meetings in the Western District of Washington
In accordance with direction from the United States Trustee, chapter 7 and chapter 13 trustees will accommodate all reasonable requests for continuances of section 341 meetings by debtors who are concerned about exposure to COVID-19.
Debtors who exhibit symptoms of a flu-like illness, have been exposed to a person with COVID-19, are within a “higher risk” group for COVID-19 complications per Centers for Disease Control and Prevention guidelines, or would be uncomfortable attending the meeting due to a risk of exposure should contact the chapter 7 or chapter 13 trustee assigned to their case to seek a rescheduling of their section 341 meeting. Debtors must provide the required notice of the rescheduling to the court and creditors, and stipulate to the extension of related deadlines, in accordance with procedures that apply to rescheduling for reasons unrelated to COVID-19.